Austrian banks want to stay in Serbia

The Governor of the Central Bank of Austria, Ewald Nowotny, said today that the Austrian commercial banks, which hold almost a fifth of the Serbia's market, were doing well and want to stay on the Serbian market.

Nowotny made a statement for the new issue of the Belgrade weekly journal "NIN", to be released on Thursday (June 7, 2012), that one of the challenges was the need to increase bank capital to cover possible risk assets, and as the key reason for this, according to him, is that Serbian loans are mainly linked to the euro or another currency.

He said the crisis particularly affected small economies, such as Serbian, which must ensure that refinancing covers not only public but also private debt.

- So, the first condition in this situation is the stability of public finances, but it is important, as we can see in the example of Spain, that even private banks do not make trouble. Only on this basis you can have economic growth. Without economic stability, economic growth is impossible - said Nowotny, who is also a member of the Council of the European Central Bank.

On the occasion of greater misunderstandings between European officials, some of which promote rigorous saving and others claim for measures to promote economic recovery, he said that it was a matter of false dilemma.

- We need both, savings and economic growth. Not one or the other but both. The question is, however, how quickly the public finances can be brought into balance, as for large, structural changes, the time is necessary - said Nowotny.

Asked whether the ECB has a script ready if Greece soon stops being the member of the euro area and how it would be in practice, he emphasized that "a good central bank must be prepared for every scenario, but does not talk too much about it."

- Our assumption is not that Greece would leave the euro zone, but that it would remain part of the monetary union, but, of course, we must be prepared for everything. Large risks are before us, and things should not be taken for granted. Personally, I am annoyed by the attitude of some people who believe that there wont' be any problems if Greece is no longer part of the eurozone - said Nowotny for NIN.